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Strategies & Market Trends : Stock Attack II - A Complete Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Berney who wrote (22738)	10/29/2001 1:14:14 AM
From: Jack T. Pearson	Read Replies (1) \| Respond to of 52237

Inflation is only concerned with the change of price. Leave money supply out of it. Price can increase without an increase in the money supply.

To: Berney who wrote (22738)	10/29/2001 1:41:28 AM
From: marginnayan	Read Replies (2) \| Respond to of 52237

. An increase in the the supply of money, followed by an immediate increase in the price of goods and services The increase in money supply should result in increase in prices of goods, provided companies have pricing power. But in this instance of manic money supply it is resulting in assets (real estate) inflation.

To: Berney who wrote (22738)	10/29/2001 12:25:16 PM
From: Jacob Snyder	Respond to of 52237

re: inflation: You defined it as: "An increase in the the supply of money, followed by an immediate increase in the price of goods and services" First, the cause/effect relationship is not necessarily immediate. Various things can, and do, put off the day of reckoning. Not forever, but a long time. "The market can remain irrational longer than you can remain solvent.", said Keynes. Second, it is not an absolute increase in the money supply that causes inflation. It is caused (eventually) by a rate of increase in the money supply, in excess of the rate of increase in goods and services. Which makes the non-inflationary rate of money increase dependant on productivity, which no one seems to be able to measure accurately. Third, and most relevant for today, is that the excess money sloshing around, looking for a home, has a variety of choices as to where it goes. It can go into current consumption, which, eventually (but not immediately), would cause consumer prices to go up. It won't happen immediately, or in the near future, because all the excess capacity, in the U.S. and elsewhere, can be brought back into production, to match the increased money with increased goods (= no inflation). Inflation only happens when the increased money can't find increased goods to buy. The money can also slosh into inflation in housing prices. Or inflation in stocks. In fact, that's likely to be the first effect. After the Fed added large amounts of liquidity to "fix" the East Asia problem in late 1998, and then again to "fix" the Y2K non-problem, we saw a big increase in stock prices, due entirely to an increase in the PE, not an increase in the E of stocks (= asset inflation). The other possibility, is that consumers and companies and banks are so scared, they just sit on any cash/easy money the government sends their way. The increased money doesn't chase anything. See Japan for details of this "pushing on a rope". So, it's not very simple.

To: Berney who wrote (22738)	10/31/2001 1:43:42 AM
From: dawgfan2000	Respond to of 52237

I saw your post on the E-Wave thread re: ENE. Message 16584162 Boy, it sure looks fugly! I would consider that the mystery charges could be "rebates" back to the Calif utilities for "expenses" this past summer. We'll hear more after the winter "all clear" sign is given that the electric crisis is back "under control" again, should we get enough moisture (Shack and the PNW combined should do it) -g/ng- Just MHG, nice work on the analysis. It does create some interesting risk/reward, as the core business shows profitability.